One of the most challenging yet important tasks in construction is having accurate estimation. The accuracy of the estimates and how closely it matches your project expenses are frequently used to predict the success or failure of a bid.
Estimation companies provide a wide range of services to assist you to complete your project as efficiently as you can. The construction estimate includes project scope, quantity takeoff, labor and equipment, construction strategy, and overall project cost.
A construction estimate aims to predict how much it costs to build a project efficiently and in a cost-effective manner. The process involves an overall cost to generate an overhead rate and that also includes a project profit margin.
To avoid additional expenditures or delays in your project completion, they give you a detailed estimated list of materials required. The construction takeoff estimators provide plenty of turnovers to their clients.
Here you’ll get to know all about general contraction services.
How can you Estimate a Construction Project?
Back in the day experts used to do manual estimation to measure the quantity of each material and enter the data into an Excel spreadsheet. Now with the advanced technology, the estimation process become easier and updated. The estimators use the latest automated software to make an accurate estimate for the project.
Estimation Method for GC
Following are the commonly used estimation methods by general contractors.
- Expert Judgement Method
As the name indicates, this method has the advantage of having the technical opinions of experts to estimate a project. The method helps generate accurate estimates for general contractors in the light of experts’ knowledge, experience, and observation.
- Bottom-up Estimation
The method is carried out by analyzing the goal of the project and scheduling it into a series of in-depth works. This is one of the most precise yet time-consuming methods for large and complex projects. This method has a very limited approach to aggregate and is unable to deeply measure every aspect of work detail.
- Analogous Estimation
The cost estimation method uses analogies of previous or similar projects such as previous data of construction projects and uses that data as a reference to provide an analogous estimate. This type of estimate applies in the early phases of project design before finalizing a sketch for the project. The contractor or project owner uses that estimate for the expenditures.
Let’s take an example of a new project of a residential setup with 4 rooms. If the general contractor has done the same kind of project before, it can be used to produce an analogous estimate.
- Parametric Estimation
This method uses unit costs and other variables to make an aggregate from the average of different projects. The resources to be used in a construction project are measured by algorithms or past statistical data.
Factors of GC
Every construction project is different and each project has unique and different characteristics that made them distinctive from others. However, several factors determine the total cost of a project. These are the most common factors that need to be taken into consideration.
It is very important to make sure that each material to be used in a construction project is included in the estimate. Be it logistics, inventory, labor cost, man-hours, taxes, and other such things that need to be included while quantifying takeoffs.
Labor costs and working hours in a project are some challenging tasks to manage alongside. If it fails to estimate the labor expense accurately, it would negatively impact the whole project. Because of that contractors could face financial consequences. Productivity and local wage rates, labor availability, quotation, and outsourcing vendor include in labor commencement.
While calculating equipment expenses and other fixed expenditures like pricing and depreciation are also taken into account. The total price also includes variable costs like petrol and maintenance. To cover costs, general contractors sometimes add a margin to leasing prices for required equipment.
- Site Condition
Where it is important to quantify the material and cost, the environmental factors are equally important to notice such as soil conditions, environmental restrictions, and weather. They also have an impact on the cost of your construction project so they should not be ignored.
- Miscellaneous Cost
These are the side expenses in construction projects but are essential for operating work properly. These include site maintenance, local permits, insurance, regulations, and security.
5 steps accuracy level of GC
According to the American Society of Professional Estimators, a five-tier approach has been employed to categorize the construction estimate.
Level 1: Magnitude Estimate
It is a preliminary rough estimation produced in the concept phase before drawings are made for a project. It is based on experience and previous relevant data.
This estimate aims to aid the project owner in measuring the possible expenditure in assistance with a strategy and planning. This helps to determine the project’s financial reliability.
Level 2: Schematic Design Estimate
It is mostly used for approving the budget and strategy used in a project. When the project outline has been finalized with the scope of work, the schematic design estimate process starts. It is the supervision of the project design when the project outline has been drawn.
Level 3: Preliminary Design Development and Estimate
It is also called a budgetary estimate which provides great accuracy in the budget estimate. The estimators include the following things to make an estimated budget for a construction project: equipment, section, elevations, floor planning, outline specifications, and schedule plans. The bidding reference also takes place in this phase.
Level 4: Construction Estimate
It is the most time-consuming phase as quantity takeoffs are also measured in this step. In this step, the construction documents have almost been completed. The estimators use drawings and construction documents to make a bid estimate.
Level 5: Bid Estimate
In this phase, the budget for the contract is issued and the project’s estimated cost has been finalized. There would be a detailed review of the contractor’s bid and change orders.
How we can help you?
Our team of professionals works hard to give extremely precise and accurate estimates so that clients can concentrate on fieldwork. Instead of spending money on expensive construction estimate tools, let us handle it for you. We also offer consultation within 24-48 hours. Our ability to meet all your estimation requirements for commercial and residential projects is a result of the experience and expertise of our team.